Chicago Ry Co v. United States

• Decision Date: 01 March 1926
• Docket Number: No. 150,150
• Parties: CHICAGO, I. & L. RY. CO. et al. v. UNITED STATES et al
• Court: U.S. Supreme Court

270 U.S. 287

46 S.Ct. 226

70 L.Ed. 590

CHICAGO, I. & L. RY. CO. et al.

v UNITED STATES et al.

No. 150.

Argued Jan. 19, 1926.

Decided March 1, 1926.

Messrs. C. C. Hine, of Chicago, Ill., and William L. Taylor, of Indianapolis, Ind., for appellants.

[Argument of Counsel from page 288 intentionally omitted] Mr. Blackburn Esterline, of Chicago, Ill., for the United States.

Mr. R. Granville Curry, of Washington, D. C., for Interstate Commerce Commission.

Mr. E. S. Ballard, of Chicago, Ill., for Chicago, L. S. & S. B. Ry Co.

Mr. Justice BRANDEIS delivered the opinion of the Court.

Four steam railroads whose lines enter Michigan City, Ind., brought this suit against the United States, in the federal District Court for that state, to set aside an order of the Interstate Commerce Commission entered April 2, 1924. The order directed the steam railroads to remove the unjust discrimination which the Commission found was being practiced against an electric railroad, which also entered that city, by refusal to switch its interstate carload traffic and to make arrangements with it for reciprocal switching. Chicago, Lake Shore & South Bend Ry. Co. v. Lake Erie & Western R. R. Co., 88 Interst. Com. Com'n R. 525. The order was assailed on the grounds that the facts found did not in law sustain the finding of unjust discrimination, that the order deprives the plaintiffs of their property in violation of the due process clause, and that the electric railroad was not shown to be within the class of carriers entitled to relief against discrimination. The Commission and the electric railroad on whose behalf the order was entered intervened in the suit as defendants. The case was heard before three judges on application for a preliminary injunction which was denied without opinion. It is here on direct appeal under the Act of October 22, 1913, c. 32, 38 Stat. 208, 220 (Comp. St. § 998).

The essential facts are these. The Chicago, Lake Shore & South Bend Railway Company, sometimes called the South Shore, is an electric passenger railroad which is engaged also in the general transportation of freight. Indiana Passenger Fares, etc., 69 Interst. Com. Com'n R. 180. Its line extends from South Bend, Ind., to Kensington, a station within the corporate limits of Chicago. At Michigan City it has physical connection with the Lake Erie & Western-a steam railroad which is a part of the New York Central system. The Lake Erie refused to establish through routes and joint rates to or from points on the South Shore and also refused to establish with it satisfactory interchange switching charges to industries at Michigan City. It had established such switching interchange with the three other steam railroads which enter that city-the Chicago, Indianapolis & Louisville, commonly called the Monon, the Michigan Central, and the Pere Marquette. To remove the alleged discrimination, the South Shore brought against the Lake Erie alone the proceeding reported in Chicago, Lake Shore & South Bend Ry. Co. v. Director General, 58 Interst. Com. Com'n R. 647. By the order there entered the Lake Erie was directed to establish such through routes and joint rates with the South Shore, and was also directed to cease and desist from discriminating by refusing to perform reciprocal switching service with it while performing such switching with the three steam railroads named. The Lake Erie elected to remove the discrimination by entering into such reciprocal switching arrangements with the South Shore.

None of the other three steam railroads had been a party to the proceeding against the Lake Erie. None of them had established through routes or joint rates with the South Shore to points on its line. Each of them refused to enter into an arrangement with it for reciprocal switching. But each of the four steam railroads had an arrangement for reciprocal switching with each of the others. Thus the South Shore still remained at a disadvantage in handling traffic at Michigan City. To remove the discrimination so arising a second petition was filed which resulted in the order here assailed. The position of the other steam railroads differed in one respect from the Lake Erie. It alone had a direct physical connection with the South Shore at Michigan City. Cars from the South Shore could not reach either the Michigan Central or the Monon without passing over tracks of the Lake Erie. They could not reach the Pere Marquette without passing over tracks of both the Lake Erie and the Monon.

The South Shore was within the switching district at Michigan City and through routes and arrangements were already in effect by which traffic from the Monon, the Michigan Central, and the Pere Marquette would be delivered there to the South Shore as an industry, and on such traffic the switching charges would be absorbed. Compare Missouri Pacific R. R. Co. v. Reynolds-Davis Grocery Co., 45 S. Ct. 516, 268 U. S. 366, 69 L. Ed. 1000. The refusal of the steam railroads complained of relates to interchange traffic with the South Shore as a carrier for shippers on its line. The Commission found that this refusal constituted a discrimination, because each steam railroad rendered a like service for each of the others. The steam railroads contend that the circumstances and conditions in respect to the steam railroads were not similar, and that, hence, there could not in law be unjust discrimination. But the absence of direct physical connection between the South Shore and the three steam railroads other than the Lake Erie is the basis of the main attack upon the validity of the order.

First. The steam railroads contend that, in effect, the order directs them to establish through routes and joint rates, or to allow a common use of terminals; that such extensions of service can legally be made only upon a finding that public necessity and convenience require them, Transportation Act 1920, c. 91, §§ 402, 405, 418, amending Interstate Commerce Act, § 1, par. 21, section 3, par. 4, and section 15, pars. 3 and 4, 41 Stat. 456, 478, 479, 485, 486 (Comp. St. Ann. Supp. 1923, §§ 8563, 8565, 8583); and that, without making such a finding, the Commission has, under the guise of a discrimination order, compelled them to extend their service. It is argued that, as a matter of law, a carrier cannot be guilty of unjust discrimination unless it is able by its own act to remove the inequality; that where there is no direct physical connection with the railroad alleged to be discriminated against, and no joint service is being rendered by the three steam railroads with the South Shore, there cannot, in law, be unjust...